MARY J. KNAPP v. JEFFREY KNAPP

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.


                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-0794-16T1

MARY J. KNAPP,

        Plaintiff-Appellant,

v.

JEFFREY KNAPP and JENNIFER
A. KNAPP a/k/a JENNIFER
GINSBURG,

        Defendants,

and

ORIGINAL CRAFTSMAN DESIGNS, LLC,
JAYSE KNAPP a/k/a JAY'SE KNAPP,
LORD AND KNAPP HOMES, LLC and OPEN
CONCEPT DESIGNS, LLC,

     Defendants-Respondents.
___________________________________

              Argued November 14, 2017 – Decided January 25, 2018

              Before Judges Fisher and Sumners.

              On appeal from Superior Court of New Jersey,
              Chancery Division, Ocean County, Docket No.
              C-000160-15.

              Michael Confusione argued the cause for
              appellant (Hegge & Confusione, LLC, attorneys;
              Michael Confusione, of counsel and on the
              brief).
          Joseph A. Lombardo argued the cause for
          respondent Original Craftsman Designs, LLC
          (Lombardo Law Offices, attorneys; Joseph A.
          Lombardo, on the brief).

PER CURIAM

     Plaintiff Mary J. Knapp filed suit in the Chancery Division

to obtain an equitable interest in properties she contended were

acquired with money she gave to her former fiancée defendant

Jeffery Knapp for her investment share.    Those funds were later

transferred to defendants Jayse Knapp, Lord and Knapp Homes, LLC,

Open Concept Designs, LLC, Original Craftsman Designs, LLC, and

Jennifer A. Knapp, who was also pled as Jennifer Ginsburg.     After

Jeffrey and Jennifer1 were dismissed from the action, the court

granted summary judgment to the remaining defendants dismissing

plaintiff's complaint, and denied plaintiff's cross-motion to file

a second amended complaint to include a claim to an equitable

interest in additional properties.   Because the judge failed to

consider plaintiff's equitable interest claim in the properties

under the theory of unjust enrichment, we reverse and remand for

trial.




1
  Because three defendants share the same last name, we use their
first names to avoid confusion. We intend no disrespect in doing
so.


                                2                            A-0794-16T1
       We review a motion for summary judgment de novo under the

same Brill standard2 applied by the trial judge.           Townsend v.

Pierre, 
221 N.J. 36, 59 (2015); W.J.A. v. D.A., 
210 N.J. 229, 237

(2012).     Thus, we examine the record in the light most favorable

to plaintiff, the opponent of the successful motion.           Brill, 
142 N.J. at 540.

       The facts as viewed in the light most favorable to plaintiff

follow.     While plaintiff was engaged to be married with Jeffrey,

she gave him money to purchase distressed properties to be repaired

and sold for a profit.        The plan was for her to be Jeffrey's

partner in the business.       Jeffrey formed Lord and Knapp Homes,

LLC, as a shell company to purchase the properties.             Plaintiff

submitted    five   signed   promissory   notes   evidencing    that   she

borrowed a total of $158,000 from three different lenders, stating

she would give it to "Jeffrey Knapp aka Lord and Knapp Homes, LLC"

for real estate investments.        Three of the notes referred to

Jeffery as plaintiff's "fiancé/business partner."3       Plaintiff also

alleged she deposited cash in Jeffrey's bank account.




2
    Brill v. Guardian Life Ins. Co. of Am., 
142 N.J. 520 (1995).
3
  Jeffrey was mistakenly identified as the "fiancée/business
partner to the lender," rather than the "borrower".



                                   3                              A-0794-16T1
      Properties        purchased    by    Lord    and    Knapp     were    eventually

transferred to Jeffrey's son, Jayse, for one dollar.                       Jayse4 later

transferred   the       property    to    his     shell    company,       Open   Concept

Designs,    for   $2500.       Plaintiff        also     alleges    Lord     and     Knapp

purchased a property and then conveyed it to Open Concept Designs,

for $500.     That same day, Open Concept Designs conveyed the

property to Original Craftsman Designs, a shell company formed by

Jeffrey's sister, Kristine McHugh, for $500.                       Plaintiff further

charges that Lord and Knapp purchased another property for $35,000

and conveyed it to Jayse for one dollar.                   Jayse in turn conveyed

the property to Original Craftsman for $2500.

      After plaintiff filed suit, Jeffrey filed for bankruptcy.

The claims asserted against him here were discharged in bankruptcy

and   dismissed.          Claims     against       Jennifer5       were    voluntarily

dismissed.        The    remaining       defendants       filed    summary       judgment

motions to dismiss the complaint.                 In her opposition, plaintiff

certified that she was defrauded by Jeffrey, who breached their

verbal agreement that they would be partners in the investment

properties acquired with her funds.                 Plaintiff also cross-moved



4
  According to the record, Jayse was in the military at the time
but had given Power of Attorney to his father.
5
 She was Jeffery's divorced second wife; plaintiff expected to be
his third wife.

                                           4                                       A-0794-16T1
to file a second amended complaint to include additional properties

acquired by Jeffrey with her funds.

     The court granted defendants' motions for summary judgment,

finding there was no contractual relationship between the parties

that made defendants liable to plaintiff for Jeffrey's alleged

fraudulent   acts   towards   plaintiff.   It   consequently    denied

plaintiff's cross-motion.

     On appeal, plaintiff contends the court should have denied

summary judgment by applying the equitable theories of unjust

enrichment, quantum meruit and constructive trust.      Since these

theories were not specifically raised before the court, we must

determine whether plaintiff demonstrates plain error by showing

on appeal the error was "clearly capable of producing an unjust

result."   R. 2:10-2.

     In its oral opinion, the court reasoned plaintiff had no

viable claims against defendants because they did not have a

contractual relationship with plaintiff, and there was no written

contract concerning an interest in property as required by the

Statute of Frauds, 
N.J.S.A. 25:1-11.       The court acknowledged

plaintiff's claim that "all the [defendant] companies involved in

this litigation are owned by family members of Jeffrey Knapp, and

that the properties were transferred between the companies in an

attempt to prevent plaintiff from recovering from them," but found

                                   5                           A-0794-16T1
defendants had no legal liability for the money plaintiff gave

Jeffrey to acquire any real estate.                   Considering plaintiff clearly

opposed defendants' summary judgment motion by arguing she had an

equitable interest in the properties, reiterating the claims made

in her complaint, we conclude that a proper application of the

theory     of   unjust       enrichment       required     the     denial      of    summary

judgment.

      To   prove       a     claim    for    unjust     enrichment,       a    party     must

demonstrate that the opposing party "received a benefit and that

retention       of    that    benefit       without    payment     would       be   unjust."

Iliadis v. Wal-Mart Stores, Inc., 
191 N.J. 88, 110 (2007) (quoting

VRG   Corp.     v.    GKN     Realty    Corp.,       
135 N.J.    539,       554   (1994)).

Plaintiff       did    not     have    to    establish     she     had    a    contractual

relationship with defendants in order to secure an equitable

interest in the properties.                 Accepting plaintiff's allegations in

the light most favorable to her, she acquired an interest in the

properties       through       the    money    she     gave   to    Jeffrey.          Hence,

defendants' ownership rights in the properties may be subject to

plaintiff's equitable interest therein through unjust enrichment.

See Cox v. RKA Corp., 
164 N.J. 487, 495 (2000) (the judicially

created doctrine of equitable conversion rests on the concept of

promoting equity between the contracting parties).



                                               6                                     A-0794-16T1
     Neither of plaintiff's other theories warrant reversal of the

summary judgment order.     The equitable remedy of quantum meruit

is a type of "quasi-contractual recovery for services rendered

when a party confers a benefit with a reasonable expectation of

payment." Weichert Co. Realtors v. Ryan, 
128 N.J. 427, 437 (1992).

To deny recovery would be unjust. N.Y.-Conn. Dev. Corp. v. Blinds-

To-Go (U.S.) Inc., 
449 N.J. Super. 542, 556 (App. Div. 2017)

(citations omitted).    Since plaintiff did not render any services

to defendants, we see no reason to apply quantum merit to protect

any interest she claims in the properties.

     A constructive trust on property is appropriate in order to

"prevent unjust enrichment and force a restitution to the plaintiff

of something that in equity and good conscience [does] not belong

to the defendant."     Flanigan v. Munson, 
175 N.J. 597, 608 (2003)

(alteration in original).      A two-prong test, however, must be

satisfied to impose a constructive trust.      Ibid.   A court must

first find one of the parties has committed a "wrongful act."6

Ibid. (citing D'Ippolito v. Castoro, 
51 N.J. 584, 589 (1968)).

Second, the "wrongful act must result in a transfer or diversion

of property that unjustly enriches the recipient."     Ibid.     Here,



6
  A "wrongful act" includes not just fraud but "mistake, undue
influence, or breach of a confidential relationship which has
resulted in a transfer of property." D'Ippolito, 
51 N.J. at 589.

                                  7                            A-0794-16T1
the alleged scammer, Jeffery, is no longer a party, and there is

no allegation that any of the defendants did anything wrong.

Therefore,     a    constructive       trust    should   not    be    imposed       on

defendants' properties to defeat summary judgment.

     Lastly,       defendants   argue    that    their   lack    of   contractual

relationship with plaintiff prevents her pursuit of claims against

their properties because she did not seek relief in Jeffrey's

bankruptcy    proceedings.        We    disagree    because     those    concluded

proceedings do not bar plaintiff's request for equitable relief

against   defendants.           Although       plaintiff's      claims       against

defendants are derivative of her allegations against Jeffrey, as

noted above, she is able to pursue her equitable interest in

defendants' properties under the theory of unjust enrichment.

     In reversing the Chancery court's summary judgment order, we

are not suggesting that plaintiff should prevail at trial; we

merely conclude plaintiff should be permitted to pursue her claims

of equitable interest in defendants' properties by proving unjust

enrichment.        Accordingly,    plaintiff's      cross-motion        to   file    a

second amended complaint should have been granted.

     Reversed and remanded.




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